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1993 (2) TMI 185 - AT - Central Excise

Issues Involved:
1. Classification of Henna Powder and Herbal Shikakai Powder.
2. Determination of whether a process of manufacture is involved.
3. Applicability of Chapter Notes 2 and 4 to Chapter 33 CETA.
4. Consideration of alternative classification as Ayurvedic medicaments.

Summary:

1. Classification of Henna Powder and Herbal Shikakai Powder:
The appellants filed a classification list for Henna Powder and Herbal Shikakai Powder under Heading 1401.00 CETA, 1985. The Department issued a show cause notice, proposing reclassification under sub-heading 3305.90 CETA, 1985, which covers "preparation for use on the hair," leading to a higher duty rate. The Assistant Collector confirmed this reclassification and imposed a penalty. The Collector (Appeals) upheld the classification but set aside the penalty.

2. Determination of whether a process of manufacture is involved:
The appellants argued that no manufacturing process was involved as they merely cleaned, ground, and mixed the ingredients. The Assistant Collector held that the processes of grinding, mixing, and packing constituted manufacturing, making the products excisable. The Tribunal, referencing the Supreme Court's decision in Empire Industries Ltd., concluded that the transformation of Henna leaves into powder and the mixing of various powders for Shikakai powder involved manufacturing processes.

3. Applicability of Chapter Notes 2 and 4 to Chapter 33 CETA:
Chapter Note 2 specifies that products suitable for use as cosmetics or toilet preparations, when put up in packings with labels or literature indicating such use, fall under Headings 33.03 to 33.07. Chapter Note 4 deems processes like labelling, repacking, or any treatment to render products marketable as manufacturing. The Tribunal found that Herbal Shikakai Powder, sold in unit packings with labels indicating its use for hair, falls under Heading 33.05 CETA, 1985.

4. Consideration of alternative classification as Ayurvedic medicaments:
The appellants' claim for classification as Ayurvedic medicaments was dismissed by the Assistant Collector for lack of evidence. The Tribunal did not find sufficient grounds to consider this alternative classification.

Conclusion:
- Herbal Shikakai Powder: Classified under Heading 33.05 CETA, 1985.
- Henna Powder: Classified under Heading 14.01 CETA, 1985 when in bulk. However, Henna Powder in unit packings, indicated for use as a hair dye, falls under Heading 33.05 CETA, 1985.

The appeal was disposed of in these terms.

 

 

 

 

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